A Firm with Above-Average Risk Is More Likely to Purchase

question 85

Multiple Choice

A firm with above-average risk is more likely to purchase insurance.This is an example of:

• A)adverse selection.
• B)moral hazard.
• C)the insurance dilemma.
• D)actuarial fairness.
• E)insurance risk.

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Definitions:

Fundamental Attribution Error

The tendency to overemphasize personality-based explanations for behaviors observed in others while underemphasizing situational explanations.

Collectivist Culture

A cultural orientation that emphasizes the needs, goals, and views of the group over individual desires or motivations.

Individualist Culture

A culture that emphasizes personal independence and the value of individual self-reliance and personal achievements.

Unflappable

Describes someone who remains calm and composed, even in highly stressful or unexpected situations.